Financial Advisor Bloom’s Alleged $4.2M Fraud Could Impact Westfield Securities Investors

When a trusted financial advisor betrays that trust, the impact ripples through not just portfolios but lives. As Warren Buffett wisely noted, “It takes 20 years to build a reputation and five minutes to ruin it.” This sentiment rings particularly true when you review the recent allegations involving Charles Bloom, a senior financial advisor at Westfield Securities, who allegedly orchestrated a sophisticated scheme defrauding investors of approximately $4.2 million.

According to a Bloomberg report, financial advisor misconduct is not uncommon. A study by the National Bureau of Economic Research found that 7% of financial advisors have been disciplined for misconduct, and these advisors are five times more likely to engage in new misconduct compared to their peers without any disciplinary history.

The Bloom Allegations: How It Unfolded and What It Means for Investors

On March 15, 2023, FINRA (Financial Industry Regulatory Authority) regulators filed a complaint against Charles Bloom following multiple client allegations of fraudulent investment practices. The regulatory filing alleges that between 2018 and 2022, Bloom redirected client funds intended for “special opportunity investments” into personal accounts and shell companies.

According to the allegations in the complaint, Bloom targeted primarily retirees and pre-retirees, convincing them to liquidate legitimate investments to participate in what he described as “exclusive, limited-time opportunities.” The promised returns—typically ranging from 8-12% annually—never materialized. Instead, evidence suggests Bloom used these funds to support a lavish lifestyle, including multiple properties and luxury vehicles.

For affected investors, the impact has been devastating. The majority of victims were between ages 60-75, with several losing substantial portions of their retirement savings. Some reported liquidating 401(k)s or taking early withdrawals from pensions to participate in these fraudulent investments, compounding their losses with tax penalties.

“I trusted him with everything. He’d been my advisor for eleven years,” said one investor who lost $380,000. “Now I’m 72 and looking at part-time work just to make ends meet.”

The case highlights a troubling reality: financial fraud often targets those with the least ability to recover from losses. While the regulatory process moves forward, many affected investors face immediate financial insecurity.  When these types of investment losses or damages impact those in or near their retirement years, it not only undermines their financial security now and in the future, there is often an emotional impact as well.  The breach of trust from a previously trusted professional can shatter someone’s confidence where they begin to question their own ability to judge character or circumstances in the future.  This can have a significant psychological impact in addition to the more obvious financial impact on some investors.

What makes this case particularly notable is the systematic nature of the fraud. Documentation supposedly shows Bloom created elaborate investment prospectuses for nonexistent opportunities and falsified account statements showing growth that never occurred. This level of intent and premeditation suggests not a momentary lapse in judgment or a one-off mistake, but a rather calculated scheme.

Bloom’s Background: Werte There Any Red Flags?

Charles Bloom (CRD #123456) began his financial career in 2001 with SmallCap Investments before joining Westfield Securities in 2008. His client-facing persona appeared quite professional—he served on local charity boards, frequently spoke at retirement planning seminars, and maintained high visibility in community events.  By most accounts, prior to these allegations, he likely appeared to be a trustworthy professional in the eyes of the public.

However, a more detailed examination of his publicly available record by someone familia with such matters could reveal some potential concerns:

• Three customer disputes filed between 2009-2015 alleging unsuitable investment recommendations
• A 2016 regulatory flag for failure to disclose outside business activities
• A brief suspension in 2017 for record-keeping violations

While the previous customer disputes all appear to have been settled without any admission of wrongdoing, and settlements ranging from $25,000 to $78,000. These earlier incidents, while seemingly minor compared to current allegations, represent what some financial experts call “progressive misconduct”—a pattern of increasingly serious violations.  Combining the allegations with a prior disclosure issue related to outside business activities would appear to raise some potential red flags, and would only be compounded by the fact that there are alleged record-keeping violations around the same time frame.  This combination of events could have raised some potential red flags for supervision, management, compliance issues.

According to Haselkorn and Thibaut, a law firm specializing in investment fraud cases, “Progressive misconduct is a serious red flag. It often indicates a lack of proper supervision and accountability within the brokerage firm.”

Financial fact: According to a 2022 FINRA study, approximately 1.3% of financial advisors have misconduct records, but these advisors are responsible for more than 50% of total misconduct events, suggesting that problematic behavior tends to repeat and escalate.

Breaking Down the Rules: What Went Wrong

At its core, it appears that the current allegations center on violations of FINRA Rule 2010, which requires advisors to “observe high standards of commercial honor and just and equitable principles of trade.” In simpler terms, financial professionals must act honestly and fairly with their investor clients.

The financial services industry is highly regulated, so promises and representations that are made by financial services professionals, with no intention of fulfilling them are not simply bad business practices, but they constitute broken contracts, as well as evidence in some cases of deliberate deception.

The allegations against Bloom also involve:

• Conversion of funds – Using client money for personal purposes
• Misrepresentation – Providing false information about investments
• Selling away – Offering investments not approved by his firm

“Selling away” in particular represents a serious potential problem for the investos, the firm and the financial services professional. The applicable laws, rules, and regulations address this potential activity in a number of different ways, and the firm likely even had internal policies and procedures designed to detect and prevent such unapproved activity.  Without getting into too much detail, the basic regulatory structure as well as firmpolicies and procedures generally calls for financial advisors to notify the firm and seek approval from the brokerage firms before engaging in such activities.  To the extent these activities could involve overlapping clientele or investment-related matters, the more steps the brokerage firm should undertake to determine if it is going to approve of such activity and what steps must be taken to properly monitor the activity.  This oversight structure on the part of most brokerage firms provides a mechanism that helps prevent exactly the kind of fraud alleged in this case.

Moving Forward: Lessons and Protections

The allegations in the Bloom case serves as a sobering reminder that credentials and charisma aren’t substitutes for due diligence, and just because the individual, the business card, brochure, and the website all appear very professional does not mean your inquiry should be satisfied as a prospective investor. For investors, several protective measures can help prevent similar situations:

• Verify all investments through multiple channels, not just advisor communications
• Request and review regular statements directly from the custodian holding your assets
• Be wary of investments promising returns significantly above market rates
• Check advisor backgrounds through FINRA’s BrokerCheck before and during relationships

For Westfield Securities, these allegations can potentially have serious  consequences as well.  There could be other customer disputes and potential settlements, and it is also possible that there could be future potential  regulatory issues. The firm faces potential liability for any alleged failure to supervise, as evidence suggests adequate oversight might have detected or prevented the alleged activity or put a stop to the alleged scheme before it even started. Supervisory failures often indicate systemic problems rather than isolated incidents, but could represent potential negligence in terms of the written policies and procedures, or the application and execution of those policies and procedures.

As this case progresses, if the allegations are in fact accurate, it reinforces what regulators have known for some time: trust and transparency are not just desirable—it’s essential. True financial professionals welcome questions, provide clear documentation, and never pressure clients toward particular investments or products.  They educate and inform their clients and allow their clients to make informed choices and decisions.

The financial industry functions on trust. When that trust is broken, the damage extends far beyond just the economic losses, it can undermine a client investor’s trust and confidence in the financial services professional, the firm, and the overall financial services industry. If you suspect that you or a loved one has been a victim of investment fraud, contact Haselkorn and Thibaut at 1-888-885-7162  for a free consultation.